With increasing concern about corruption, citizens are demanding to be informed about the government’s intend to achieve and actual accomplishments. Poor program management contributed by ineffective use of public funds can be the main factor to the growing deficits accumulating to an unsustainable increase in debt as demonstrated by the federal budget. Therefore, government programs and management functions at significant risk of waste, fraud, and abuse must be identified, addressed, corrected, and monitored.
All government programs are susceptible to fraud, waste, abuse, and mismanagement for two main reasons:
- Governments, by nature and size, manage a large volume of public funds.
For example, the total of U.S. federal, state, and local direct revenues averaged $6 trillion for each fiscal year between 2014 and 2016. The U.S. federal government funded a broad array of programs and operations in the fiscal year 2014 for about $3.5 trillion.
- Government entities are one of the largest buyers of goods and services.
They engage in contracts with vast numbers of third parties exposing them to fraud risks. For example, in 2014, the U.S. government spent $447 billion in the primary contracts.
Public officials, legislators, and citizens demand to know not only whether government funds are handled properly and in compliance with laws and regulations, but also whether government entities, programs, and services are achieving the purposes for which they were authorized and funded and whether they are doing so economically and efficiently.
Government auditing, rooted in the need to have some verification, provides means of access to the performance of those entrusted with public resources to reinforce the expectation that the government entities and officials will carry out their functions effectively, efficiently, ethically and in accordance with the applicable laws and regulations.
An effective government audit activity strengthens governance by significantly increasing citizens’ ability to hold the government entities accountable through the use of internal or external audit services or a combination of the two.
To understand the value of audit, we must first recognize:
- What are the differences between governments and business enterprises?
- What are the public governance principles?
- How has government auditing evolved?
- What are the basic elements of government auditing?
- Why is government auditing necessary?
- What are the standards applied to the audit of government entities?
This book, An Overview of Government Auditing in US, written from the perspective of a student and professional, details these and many more integral questions connected with this important topic.
It is a short and focused eBook, covering the governmental environment, the concept and significance of government auditing, and basics of government auditing standards. The reader will have a good understanding of the purpose and applicability of government auditing standards, the Yellow Book structure, the differences between the Yellow Book and other auditing standards, the responsibility of management and officials of government programs, and the requirements and elements of ethical principles for auditors.
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